Last mile delivery, a challenge for organizations to go to scale.

Distribution is of the big challenges facing any organization or company looking to move the dial in a significant way in delivery of modern lighting and energy services to the off-grid poor.

Distribution in a replicable and scalable way is an even greater challenge. Many organizations look to co-opt and collaborate with NGO's in rural health and other outreach focused groups operating on the ground already. The problem that often occurs is that the distribution is now contingent on the quality, consistency and availability of those various groups. This is not a highly scalable approach, though one that has certainly added value for many small companies in aggregate. 

Getting from a regional warehouse to a customers home often doubles the cost of a system by the time you include transport costs, chain of custody, installation etc. So how does an organization or company with a solar product or service to offer develop a last mile delivery model that can go to scale?

Off.Grid:Electric sees the key to replicable distribution in understanding the regional context and constraints, and building it in to every facet of a design/manufacture/distribute/support business model. What this means is that systems must be designed to be installed by low skilled technicians, materials must be designed for longest possible life and lowest possible maintenance (there is little to no existing service infrastructure in East Africa) and last mile delivery must be done in an extremely efficient manner. 

This blog post is intended to serve as a spark to engage members in discussing the pros and cons, strengths and weaknesses of various last mile delivery models they have seen, tried, use now or scrapped.

A big thanks to Evan for leading the charge on this new site. If we keep it on topic and substantial, it could be a great tool for our niche industry!

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Comment by Yotam Ariel on May 19, 2013 at 4:49pm

Interesting, Roland. Thanks.

Comment by ROLAND CATELLIER on May 17, 2013 at 8:00pm

 Yotam and Samson,

great discussion on last mile, I wonder  why there is so little talk of route sales distribution? If you want to learn more about route sales distribution Google " route sales distribution"  and "route sales distribution software" on USA Google for best result.   I'm please to announce that we are having our first booth camp to train our first group of Distributor tomorrow May 19,2013. Our localized China site is operational  . Our vision is to make our site available to social entrepreneurs in every country that has a need for it. Our site has been modified from the traditional software, low cost for all parties,multiple manufactures can have a wholesale market page, distributors can represent multiple manufacturers , we have incentive's like tradition route sales , exclusive territories  for distributors and ownership of retailers contact information, this IP is transferable as a exist plan, for a price equal to 1-3 yrs annual income. What this mean for a distributor is that he/she are building their own business.   

Comment by Evan Mills on May 17, 2013 at 11:52am

"Last-meter"  distribution chain!

Comment by Yotam Ariel on January 16, 2013 at 3:22pm

Thank you so much Lawal for your valuable input. I bet readers are working on a solution.(I know I am)

Comment by Adedayo Lawal on January 16, 2013 at 2:14pm
I am commenting based on my own experience in distribution of solar lamps in Nigeria.The problem with distribution here are;
1)Most of the solar lamps are expensive compare to their grid based low quality substitute e.g.greenlight planet sun king Pro average retail price is around $42 per pc to a grid based lamp of the same lumen or even higher selling for $12.
2)Sole-importer here dont provide after sales training to sub distributors.
3)Lack of replacements parts for physical damages or LOSS which warranty does not cover e.gphone charging kits,batteries,solar panels e.t.c.
4)Most importer are not encouraging,they dont reduce price as purchase increase i.e. Rebate.
Comment by ROLAND CATELLIER on November 13, 2012 at 7:46am

I'm pioneering a service to manufactures to bring product to local neighborhood shops in urban and rural areas, on a commission based distributor network, we recruit recent graduates from universities, who will not find jobs what ever their degree is, entrepreneurial opportunities , they own retailer  list and a exclusive territory  for multiple competing or non competing products. This is a web based service, we are looking for socially minded, non discriminatory individuals or organization, to apply for a licence to operate our website in all developing nations, in South America, Africa, and Asia Pacific. Thank you for this site doing such a noble work of lighting the developing world.

Comment by Yotam Ariel on November 9, 2012 at 7:04pm

Thank you, Samson :-)

Comment by samson tsegaye on November 9, 2012 at 2:19am

Dear Yotam

I was the one who told you, why villagers preffer loan,

Dear Joshua, the solution you put for maintanance issue, i agree on one of the point, which you mentiond on the design, the other best solution is to have well establishd network with well traind technicians, thes can help users easily to solve their problem,

good day


Comment by Yotam Ariel on November 8, 2012 at 11:59pm

Nice Joshua. I think your approach is the way to go.

I recall talking with SELCO in India, it's all about the on going service,
they are never more than 2 hours away from a customer, and the result:
even when the grid reaches the village, the people still opt for SELCO.

This is also what Samson would tell you about their operations in Ethiopia.

I can't remember who told me, but, villagers, will, on purpose hold back from
paying all the loan, as they are afraid that once it's been paid, no one
would care to help them if something goes wrong.

This is also why even the smallest malfunction is a disaster in terms 
of the reputation of solar technology and future adoption of it.

Now, here's an insider one:

Are you familiar with Hult Global Challenge? well, it's some us$300,000
which Mr. Clinton's fund give to SolarAid, but not before teams from top
business schools around the world compete on making the best plan
for helping SolarAid goal: sell 1,000,000 lanterns by some year (I forgot which year, sorry).

So, I was actually helping the team from NYU Abu Dhabi (they won),
simply sharing insights, and making email intros to experts..

Ok, ready for the interesting part?

Their conclusion was: don't sell 1,000,000 lanterns.
It is not a good goal!
Instead, build trust, and after-sales support centers/system.

Comment by Joshua Pierce on November 8, 2012 at 11:20pm

THanks for the comments all. One key element to the issues Yotam raises (sales, installation and after sales support) stems from an issue of incentive as we see it. The retail distributor is not incentivized to provide any more after sales support than absolutely required to maintain market credibility. Further, it is exponentially more expensive for retailers to provide reliable warranty and customer service support after sale than other models.

In an environment of extreme price sensitivity, this also conflicts with a philosophy of quality over lowest price to the consumer.

These are but a few of the reasons we support a service model over a retail model. We find that the security provided by free ongoing service and support via local agents often trumps the desire to own the system outright. 

The difference seems to be around perception of solar systems as an "appliance" rather than a bit of infrastructure who's main value is the service it provides (light, charging, TV etc). 

Therein (we hope) lies the beauty of a rich variety of options for off-grid folks. Solar lanterns and torches as a place to start at a reasonable price: and low risk, low cost integrated solar infrastructure (systems actually installed professionally in a home) as the next logical step. The solar lantern is the ambassador of modern energy services. 


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